TREATMENT OF EXCESS PENSION ASSETS USED FOR RETIREE HEALTH BENEFITS.

SEC. 731. TREATMENT OF EXCESS PENSION ASSETS USED FOR RETIREE HEALTH BENEFITS. (a) 5-Year Extension.—Paragraph (5) of section 420(b) (defining qualified transfer) is amended by striking “1995” and inserting “2000”. (b) Minimum Benefit Requirements.—Paragraph (3) of section 420(c) (relating to requirements of plans transferring assets) is amended to read as follows: “(3) Maintenance of benefit requirements.— “(A) In general.—The requirements of this paragraph are met if each group health plan or arrangement under which applicable health benefits are provided provides that the applicable health benefits provided by the employer during each taxable year during the benefit maintenance period are substantially the same as the applicable health benefits provided by the employer during the taxable year immediately preceding the taxable year of the qualified transfer. “(B) Election to apply separately.—An employer may elect to have this paragraph applied separately with respect to individuals eligible for benefits under title XVIII of the Social Security Act at any time during the taxable year and with respect to individuals not so eligible. “(C) Benefit maintenance period.—For purposes of this paragraph, the term benefit maintenance period’ means the period of 5 taxable years beginning with the taxable year in which the qualified transfer occurs. If a taxable year is in 2 or more benefit maintenance periods, this paragraph shall be applied by taking into account the highest level of benefits required to be provided under subparagraph (A) for such taxable year.” (c) Conforming Amendments.— (1) Clause (iii) of section 420(b)(1)(C) is amended by striking “cost” and inserting “benefits”. (2) Subparagraph (B) of section 420(e)(1) is amended to read as follows: “(B) Reductions for amounts previously set aside.—The amount determined under subparagraph (A) 108 STAT. 5004shall be reduced by the amount which bears the same ratio to such amount as— “(i) the value (as of the close of the plan year preceding the year of the qualified transfer) of the assets in all health benefits accounts or welfare benefit funds (as defined in section 419(e)(1)) set aside to pay for the qualified current retiree health liability, bears to “(ii) the present value of the qualified current retiree health liabilities for all plan years (determined without regard to this subparagraph).” (3) Subparagraph (D) of section 420(e)(1) is amended by striking “or in calculating applicable employer cost under subsection (c)(3)(B)” and inserting “and shall not be subject to the minimum benefit requirements of subsection (c)(3)”. (4) (A) Section 101(e)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021(e)(3)) is amended by striking “1991” and inserting “1995”. (B) Section 403(c)(1) of such Act (29 U.S.C. 1103(c)(1)) is amended by striking “1991” and inserting “1995”. (C) Paragraph (13) of section 408(b) of such Act (29 U.S.C. U08(b)(13)) is amended— (i) by striking “1996” and inserting “2001”, and (ii) by striking “1991” and inserting “1995”. (d) Effective Dates.— (1) Extension.—The amendments made by subsections (a) and (c)(3) shall apply to taxable years beginning after December 31, 1995. (2) Benefits.—The amendments made by subsections (b) and (c)(1) and (2) shall apply to qualified transfers occurring after the date of the enactment of this Act.